Whether Bail petition can be rejected by High Court on grounds of GST evasion?

PJ/Case Law/2018-2019/3515

Case: Vikas Goel and another v/s Central Goods and Services Tax Commissionerate, Gurugram
Citation: CRM No.M-45649 of 2018 (O&M)
Issue: Whether Bail petition can be rejected by High Court on grounds of GST evasion?
Brief Facts: The Director-General of Goods and Services Tax Intelligence, Gurugram Zonal Unit had arrested the petitioner under the provisions of section 69 of the Central Goods and Services Tax Act, 2017. Petitioners have been taken into custody under Section 69 of the CGST Act without making any assessment by the competent authority. Petitioner claimed that a complaint has been filed and the petitioners are only to face trial in the complaint case. The revenue, on the other hand, contended that there were serious allegations against the petitioner. The assessment proceedings were independent proceedings and had nothing to do with the complaint case.
Appellant’s contention: The learned counsel of petitioners argued that petitioners havebeen taken into custody under Section 69 of the CGST Act without making any assessment by the competent authority. Furthermore, even if the respondent makes assessment, that assessment firstly, is appealable and can be quashed, secondly, the petitioners have remedy to compound that order by paying the tax etc. He next argued that a complaint has been filed and the petitioners are only to face trial in the complaint case and the bail must be granted to the petitioners.

Respondent’s Contention and Reasoning of Judgment. Respondent argued that there are serious allegations against the present petitioners and they have made bogus billing and adjusted the amount without any actual transportation of the goods or sale of goods etc. Only paper transactions were done and amounts have been adjusted and wrongly claimed relief of more than Rs.80 crores.
It was further argued that assessment proceedings are independent proceedings and have nothing to do with the complaint case. As per learned counsel for the respondent, the officer from the office of Director General of Goods and Services Tax Intelligence visited the registered premisses of M/s Sriram Industries and said premises was found closed and on enquiry from the person available in the close vicinity, it was ascertained that the said premises was closed for the last five years. Then search was conducted leading to recovery and seizure of a large number of incriminating documents indicating evasion of CGST duty.
Decision: Keeping in view the facts and circumstances of the case, and gravity of the offence and in view of the fact there were justifiable grounds to arrest the petitioners under Section 69 of the CGST Act and further in view of the fact that case involves evasion of more than Rs.80 crores of tax under the CGST and such offence is punishable with imprisonment for a period of five years and complaint is stated to have already been filed, court found no ground to grant benefit of regular bail to the petitioners.
Comment: The gist of this case is that as there was the huge amount involved in the present case and there are strict provisions to deal with such cases under section 132 (1) (a) to (d) making such offences cognizable and non bailable the shield of assessment not being made by authorities is of no use.
Prepared by – Shubhanshu P. Jain

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PJ/Case Law/2018-2019/3515

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